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The economic impact of refugees in Swedish municipalities

Löfström, Rasmus LU (2020) NEKP01 20201
Department of Economics
Abstract
This paper analyzes the impact of receiving refugees on municipal income, income inequality,
and public finances. The empirical analysis compares Swedish municipalities between 2000
and 2018, a period with large and fluctuating waves of refugees, both across years and municipalities.
This paper uses the variance within municipalities, i.e., fixed effects. The results show
that an increase of the refugee population by one percentage point decreases income per capita
by 3500 SEK and increases inequality by 0.32 points in the Gini coefficient. Alternatively, an
increase in the refugee population share by one standard deviation of the within municipality
variance decreases income per capita by 0.19 standard deviations and increases the... (More)
This paper analyzes the impact of receiving refugees on municipal income, income inequality,
and public finances. The empirical analysis compares Swedish municipalities between 2000
and 2018, a period with large and fluctuating waves of refugees, both across years and municipalities.
This paper uses the variance within municipalities, i.e., fixed effects. The results show
that an increase of the refugee population by one percentage point decreases income per capita
by 3500 SEK and increases inequality by 0.32 points in the Gini coefficient. Alternatively, an
increase in the refugee population share by one standard deviation of the within municipality
variance decreases income per capita by 0.19 standard deviations and increases the Gini coefficient
by 0.62 standard deviations. This effect is persistent over time but smaller for richer
municipalities. The aggregated net effect on municipal public finances is positive, when including
the effect on government grants, but negative if not included. This is true both on a five
and a ten years horizon. Excluding government grants, the net revenue of receiving a refugee is
negative 122 thousand SEK per year, the first ten years after arrival. (Less)
Please use this url to cite or link to this publication:
author
Löfström, Rasmus LU
supervisor
organization
course
NEKP01 20201
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Refugees, income, inequality, public finance, immigration
language
English
id
9013567
date added to LUP
2020-08-29 11:08:59
date last changed
2020-08-29 11:08:59
@misc{9013567,
  abstract     = {{This paper analyzes the impact of receiving refugees on municipal income, income inequality,
and public finances. The empirical analysis compares Swedish municipalities between 2000
and 2018, a period with large and fluctuating waves of refugees, both across years and municipalities.
This paper uses the variance within municipalities, i.e., fixed effects. The results show
that an increase of the refugee population by one percentage point decreases income per capita
by 3500 SEK and increases inequality by 0.32 points in the Gini coefficient. Alternatively, an
increase in the refugee population share by one standard deviation of the within municipality
variance decreases income per capita by 0.19 standard deviations and increases the Gini coefficient
by 0.62 standard deviations. This effect is persistent over time but smaller for richer
municipalities. The aggregated net effect on municipal public finances is positive, when including
the effect on government grants, but negative if not included. This is true both on a five
and a ten years horizon. Excluding government grants, the net revenue of receiving a refugee is
negative 122 thousand SEK per year, the first ten years after arrival.}},
  author       = {{Löfström, Rasmus}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{The economic impact of refugees in Swedish municipalities}},
  year         = {{2020}},
}